Pakistan: Government funds in private accounts

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The Public Accounts Committee (PAC) under the chairmanship of Nadeem Afzal Gondal was informed by the Auditor General of Pakistan (AGP) Buland Akhtar Rana that the mechanism of internal audit was weak in Heavy Industries Taxila (HIT) which accounted for failure to deposit billions of rupees in the treasury, as required by law, and instead depositing it in the company accounts. The PAC directed the Secretary of Ministry of Defence Production (MoDP) to furnish a certificate within 15 days to the effect that no amount is outside government accounts and provide details of all cases against MoDP pending in the superior courts. The PAC was informed over two years ago when its chairmanship was held by the Leader of the Opposition Chaudhry Nisar Ali Khan that three generals working for the National Logistics Cell (NLC) namely Lieutenant General Khalid Munir Khan, Lieutenant General M. Afzal Muzaffar, Major General Khalid Zaheer Akhtar were responsible for incurring a 2 billion rupee loss to the national exchequer due to their decision to invest the money in stock market. The time period was 2004 to 2008. In their defence the three generals have provided documentary evidence that they operated well within the policy guidelines provided by the then government led by General Musharraf. The PAC backed off when the army decided to reinstitute the three men to face a military court and to date there has been no news about the fate of the military inquiry or of the three men. The objective of placing money outside the government accounts is obviously to profit from the rate of return on these accounts - a profit that may be used for personal gain or for the company's gain. The rule book dictates that any federal government release to any entity that remains unused in any given year would automatically be adjusted for the release in the next year; hence the company's principal accounting officer may argue internally that putting the money into a non-government account would enable the entity to not allow the government to adjust the unused amount of any one year for the next. But for a start it is imperative that an inquiry into who benefited from the profit needs to be undertaken and responsibility placed on the relevant officials - those who are directly implicated and those without whose connivance this would not have been possible in the light of the Supreme Court verdict which no longer accepts the plea that failure to follow orders is a valid justification for violating the law. These are very disturbing revelations and there are many more examples of gross violation of government policies designed to enhance transparency and hold the guilty accountable. Millions of Pakistanis would have little, if any difficulty in believing that ranking Pakistan as the seventh most corrupt nation in the world by the Washington-based World Justice Project in 2012 is fully justified which leads one to conclude that it is imperative for the government to turn its attention to reforms towards ensuring greater transparency and accountability. The report is a damning indictment of our system as it maintains that "Pakistan shows weaknesses in most dimensions when compared to its regional and income group peers. Low levels of government accountability are compounded by the prevalence of corruption, a weak justice system, and a poor security situation, particularly related to terrorism and crime. The country scores more strongly on judicial independence and fairness in administrative proceedings". The accountability bill remains stalled in parliament and holding public functionaries responsible for gross and sustained violations of government procurement and audit rules and regulations appears to be the sole domain of some whistle-blowers and the media. It is imperative that state institutions be strengthened to perform these critical functions effectively.